On-chain analytics firm Glassnode has explained why bitcoin‘s current rally looks different from the last two surges this year.
bitcoin has seen aggressive accumulation during the latest rally
According to the latest weekly report of glass node, btc has seen huge accumulation recently. The indicator of interest here is the “accumulation trend score,” which tracks accumulation and distribution behavior among bitcoin investors over the past 30 days.
The metric verifies this behavior not only by considering the balance changes that occur in the holders’ wallets, but also by taking into account the relative size of the investors.
When the value of this indicator leans towards 1, it means that large investors have been accumulating and/or a significant number of small investors have been accumulating. On the other hand, the fact that the metric is close to the 0 mark suggests that the market has been watching the distribution by holders.
Naturally, the closer the indicator is to the extremes 1 and 0, the stronger the behavior of investors. Now, here is a chart showing how the bitcoin Accumulation Trend Score value of the 7-day moving average (MA) has changed over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/11/This-Bitcoin-Rally-Is-Different-From-The-Previous-Two-Heres.png" alt="bitcoin Accumulation Trend Score” width=”2000″ height=”1152″ data-recalc-dims=”1″/>
Looks like the value of the metric has been quite close to 1 in recent days | Source: Glassnode's The Week Onchain - Week 47, 2023
As shown in the chart above, bitcoin‘s accumulation trend score has had a dark purple value recently, suggesting that the market has been in aggressive accumulation mode.
Interestingly, these values very close to 1 have held during the latest surge the cryptocurrency has seen below the $30,000 level and investors only continue to add more to their wallets.
This is different from the behavior seen in the first two rallies of 2023, where some accumulation occurred but the market quickly moved into intense distribution.
To see what accumulation looks like at a cohort level, Glassnode has also shared data from individual trend accumulation scores from the various wallet groups in the sector.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/11/1700684288_184_This-Bitcoin-Rally-Is-Different-From-The-Previous-Two-Heres.png" alt="bitcoin Cohorts” width=”2000″ height=”874″ data-recalc-dims=”1″/>
It would appear that the market as a whole has been accumulating recently | Source: Glassnode's The Week Onchain - Week 47, 2023
“We can see that conditions throughout 2023 have caused net outflows in several cohorts, suggesting non-uniform behavior by different investor cohorts,” notes the analysis firm.
The non-uniform distribution behavior continued until October, when the stars began to change for the cryptocurrency. It appears that all cohorts switched to accumulation at that time and have continued to do so since.
“This broad pick-up in accumulation means that strong market performance and increasingly optimistic hopes around a btc spot ETF are improving investor confidence in the uptrend,” explains Glassnode.
btc Price
bitcoin has recorded a 2% decline in the last 24 hours after Binance, the largest cryptocurrency exchange by trading volume, saw its CEO resign from office.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/11/This-Bitcoin-Rally-Is-Different-From-The-Previous-Two-Heres" alt="bitcoin price chart” width=”1534″ height=”869″/>
The value of the coin has seen some recovery from the initial plunge | Source: BTCUSD on TradingView
Featured image from iStock.com, TradingView.com charts, Glassnode.com
